Overview
- Headline CPI fell to 0.25% year-on-year in October, while CPI excluding gold stood at -0.57%, with SBI Research expecting ex-gold readings to stay negative for the next two months.
- SBI estimates the September GST rationalisation reduced measured inflation by about 85 basis points, reinforcing food-led disinflation.
- A surge in gold pushed personal care and effects inflation to 57.8%; core CPI was roughly steady at 4.33% but eased to about 2.6% when gold was excluded.
- Inflation trends vary sharply by state, with Kerala at 8.56% and 12 of 22 states reporting negative inflation.
- The RBI kept rates unchanged in October, and analysts at Crisil and Bank of Baroda now see CPI averaging near 2.5% this fiscal and anticipate at least one repo cut, as SBI flags the need for careful communication and liquidity management ahead of December.